Dell’s outlook disappoints as PC market falters

ROUND ROCK, Texas, Wed Aug 22, 2012 – Dell Inc. warned of a challenging second half and slashed its full-year earnings outlook as customers cut back on computer purchases ahead of the launch of Microsoft’s Windows 8 software, sending its shares down more than 4 percent.

Dell – once the world’s top PC maker and a pioneer in computer supply chain management – is struggling to defend its market share against Asian rivals like Acer Inc and Lenovo, and the fast-growing adoption of tablets like Apple Inc’s iPad.

Founded by CEO Michael Dell, it is in the midst of a turnaround, juggling acquisitions to bolster growth with the need to fatten margins by trimming expenses even as global tech spending appears to be slipping. In May, it warned that global tech spending is weakening faster than anticipated.

The No. 2 U.S. PC maker on Tuesday forecast revenue would slide 2 percent to 5 percent in the fiscal third quarter from the second, to $13.8 billion to $14.2 billion. That lagged Wall Street’s target of $14.85 billion.

It is predicting earnings per share of “at least” $1.70 for fiscal 2013, compared with a previous forecast for more than $2.13.